Rove Responds to DNC's 'Stupid' Foreign Funding Allegations

This is a rush transcript from "Hannity," October 11, 2010. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: So with the midterm elections just around the corner, Democratic candidates are feeling the heat in some key races. Out in Nevada, it looks as if Senate Majority Leader Prince Harry Reid may be out of a job come November.

Now the latest TCJ poll shows him trailing Republican Sharron Angle by six points, 52-46. Out in the Golden State, Carly Fiorina is putting pressure on the Democratic fixture Barbara Boxer. Fiorina now trails Boxer by just two points, 48-46, well within the margin of error.

Now these polls and others like them are clearly causing panic in the Democratic ranks, because their attacks are getting more and more desperate. Now the DNC is out with a brand new ad that according to the Baltimore Sun sets a new low for political mudslinging and one of its targets is my next guest, Karl Rove. Let's take a look.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Karl Rove, Ed Gillespie, they're Bush cronies. The U.S. Chamber of Commerce, they're shields for big business and they're stealing our democracy, spending millions from secret donors to elect Republicans to do their bidding in Congress.

HANNITY: Joining me now with reaction to sleazy attack is the architect, former adviser to President George W. Bush, the one and only Karl Rove. Karl, welcome back.

KARL ROVE, FORMER BUSH ADVISER: Thanks for having me.

HANNITY: You had harsh words to say about this weekend. I want to give you a little bit more time to go into specific detail here. You say these charges are false and outrageous and you are pretty upset about them.

ROVE: Well, look, I'm not that upset about it. I think this is stupid on the White House's part, but I'm not the only one who has been saying that there is no proof of this.

The New York Times ran a story on Saturday morning in which they said the White House could produce no proof for its charge. CBS on Sunday morning had on David Axelrod and Bob Schieffer literally was incredulous when Axelrod said, well, you know, in essence I don't have any proof. He said is that the best you could come up with?

HANNITY: I got that cut, but before -- I want to give you folks a chance to respond but -- as long as you're talking about it. Let's roll that tape.

ROVE: You bet.

(BEGIN VIDEO CLIP FROM CBS' 'FACE THE NATION')

BOB SCHIEFFER, HOST: This part about foreign money, that appears to be peanuts, Mr. Axelrod. I mean, do you have any evidence that it is anything other than peanuts?

DAVID AXELROD, WHITE HOUSE SENIOR ADVISER: Well, do you have any evidence it is not, Bob?

SCHIEFFER: I guess I would put it this way, if the only charge three weeks into the election that the Democrats can make is that somehow this may or may not be foreign money coming into the campaign, is that the best you can do?

(END VIDEO CLIP)

HANNITY: Actually that was one of the funniest moments I've ever seen on a Sunday show, good for Bob Schieffer.

ROVE: Absolutely, Fact Check came out with an article saying foreign money really? The respected journalist who heads up Fact Check Brooks Jackson said this, "accusing anybody of violating the law is a serious matter requiring serious evidence to back it up. So far Democrats have produced none."

You know, this is an attempt to mislead the American people. To draw their attention away from the news that came out last week that it is really bad for the Democrats.

There are a couple of numbers that explain why they're doing this, why they're out there alleging something for which they have not one scintilla of evidence and here they are. In September, the American economy shed 95,000 jobs, the unemployment rate is 9.6 percent.

If the Democrats think -- if the White House thinks that it can take attention away from those numbers by running these phony ads and stirring up this controversy about the chamber and about Ed Gillespie and me, they are kidding themselves.

In fact, Gallup came out this afternoon with new numbers on the generic ballot in a low turnout scenario, Republicans have a 56-39 advantage. A low turnout election, they have a 53-41 advantage. That is nearly twice as big as the gap was in 1994. This is all about the White House thinking the American people are so stupid as to care more about this made-up controversy than they are about the economy and jobs and this failed stimulus and spending and deficits and Obamacare.

HANNITY: And by the way, there were people like Halpert (ph) and others out there pointing out the same thing, which is where their focused should have been.

But if you look at, it's almost like a moving target and it seems like they are trying to throw everything they can up against the wall in the hopes something sticks. Last week, it was Fox News, they've gone after the pharmaceutical industry. They've gone after the health care industry. They've gone after talk radio and Rush Limbaugh, and Sean Hannity, now it is Karl Rove and Ed Gillespie. What are they trying to accomplish except maybe a long-term distraction?

ROVE: Well, yes, that's it, a long term distraction and look, they have a low opinion of the American people. They think the American people are going to care more about this phony issue that they've dummied up with no evidence whatsoever than the American people care about these things, which are driving the election.

And I think -- look, there's a bunker mentality inside the White House. A belief that by creating some enemy, taking a rip and a page out of Saul Alinsky and creating an enemy, a couple weeks ago, it was John Boehner, you're right. They started this whole thing with Rush Limbaugh. They've attacked the Tea Parties. I mean, none of that has worked. They have spent a year pursuing this strategy just periodically changing the names of the people that they're attacking.

Now, look, the chamber who's been bearing the brunt of this, they are trying to intimidate the chamber into inaction and they are not going to succeed. And I want to say one thing about Ed Gillespie. It is clear from looking at that footage that they are trying to imply that's Ed Gillespie mugging that woman in the garage. It's not me. It's Ed Gillespie and I want to say on behalf of my friend Ed Gillespie, that's despicable that they would suggest the Ed Gillespie would be mugging that woman in the garage.

HANNITY: Well, it's -- they're almost also suggesting it seems that you are unpatriotic. You know, stealing -- if we look at the actual term of this thing, you know, the actual words that they say here. You know, basically saying stop stealing our democracy.

ROVE: Yes, threatening our democracy.

HANNITY: But here's my point on this. I mean, these are incendiary false charges. You know, and then Axelrod forcing people to disprove, when did you stop beating your wife and raping the innocent --

ROVE: Well, it is worse than that, Sean. It's worse than that. The president made this charge on the basis of a blog posting by Think Progress, which is an organization affiliated with the Center for American Progress headed by John Podesta, a 501C-4 that does not report its donors.

The president benefited from $400 million in campaign spending in 2008 by outside groups most of which do not report their donors. The American Association of Retired Persons, the League of Conservation Voters, the National Resources Defense -- Barack Obama ran a campaign in which he did not produce the names of donors, I believe under $250 or maybe under $100, amounting to tens of millions of donations that he hid. He could have voluntarily produced those names as the Bush campaign did in 2000 and 2004 for every single donor, but the president and vice president who say if you don't release the donors you're a threat -- they refused to produce their donors. How hypocritical is that?

HANNITY: It's extremely hypocritical, but isn't the purpose though of the law so that that information would not be used to intimidate people with the threat of an audit, investigation?

ROVE: Absolutely. Absolutely. In fact, it was upheld in a 1958 case involving an attempt by the state of Alabama to get the donors to the NAACP and the Supreme Court said under the law, the 501C-4 does not have to disclose its donors.

We're simply doing what Democratic organizations like MoveOn.org and all across the panoply of the left did for years and years and years and it was OK when they did it, but when Republicans and conservatives start to do it, it now becomes a threat to democracy.

How hypocritical is that? And remember, let's not forget, this is all about hoping the American people are so stupid as to think this thing trumps the failure of the administration to create jobs and control spending and get the deficit under control and the failure of the administration to pass a health care that will pass the approval of the American people.

HANNITY: All right, Karl Rove, a very strong response. We appreciate you giving it here. Thanks for being with us.

ROVE: You bet.

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